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Consumer Price Index, Phoenix area – August 2019

Area prices were up 0.5 percent over the past two months, up 3.0 percent from a year ago

Prices in the Phoenix area, as measured by the Consumer Price Index for All Urban Consumers (CPI-U), increased 0.5 percent for the two months ending in August 2019, the U.S. Bureau of Labor Statistics reported today. (See table A.) Assistant Commissioner for Regional Operations Richard Holden noted that the August increase was influenced by higher prices for all items less food and energy. (Data in this report are not seasonally adjusted. Accordingly, bi-monthly changes may reflect seasonal influences.)

Over the last 12 months, the CPI-U increased 3.0 percent. (See chart 1 and table A.) The index for all items less food and energy advanced 3.6 percent over the year. Food prices increased 3.0 percent. Energy prices decreased 2.6 percent, largely the result of a decrease in the price of gasoline. (See table 1.)

Food

Food prices decreased 0.4 percent for the two months ending in August. (See table 1.) Prices for food at home decreased 0.6 percent, while prices for food away from home were unchanged for the same period.

Over the year, food prices increased 3.0 percent. Prices for food away from home advanced 3.1 percent since a year ago, and prices for food at home increased 3.0 percent.

Energy

The energy index decreased 3.4 percent for the two months ending in August. The decrease was mainly due to lower prices for gasoline (-8.0 percent). Prices for natural gas service declined 2.0 percent, but prices for electricity increased 3.2 percent for the same period.

All items less food and energy

The index for all items less food and energy advanced 1.1 percent in the latest two-month period. Higher prices for apparel (2.6 percent) and shelter (1.9 percent) were partially offset by lower prices for education and communication (-0.1 percent).

Over the year, the index for all items less food and energy advanced 3.6 percent. Components contributing to the increase included household furnishings and operations (7.3 percent) and shelter (5.6 percent). Partly offsetting the increases were price declines in apparel (-5.8 percent) and education and communication (-1.4 percent).

The October 2019 Consumer Price Index for the Phoenix area is scheduled to be released on November 13, 2019.

Technical Note

The Consumer Price Index (CPI) is a measure of the average change in prices over time in a fixed market basket of goods and services. The Bureau of Labor Statistics publishes CPIs for two population groups: (1) a CPI for All Urban Consumers (CPI-U) which covers approximately 89 percent of the total population and (2) a CPI for Urban Wage Earners and Clerical Workers (CPI-W) which covers 28 percent of the total population. The CPI-U includes, in addition to wage earners and clerical workers, groups such as professional, managerial, and technical workers, the self-employed, short-term workers, the unemployed, and retirees and others not in the labor force.

The CPI is based on prices of food, clothing, shelter, and fuels, transportation fares, charges for doctors' and dentists' services, drugs, and the other goods and services that people buy for day-to-day living. Each month, prices are collected in 87 urban areas across the country from about 6,000 housing units and approximately 24,000 retail establishments--department stores, supermarkets, hospitals, filling stations, and other types of stores and service establishments. All taxes directly associated with the purchase and use of items are included in the index.

The index measures price changes from a designated reference date (1982-84) that equals 100.0. An increase of 16.5 percent, for example, is shown as 116.5. This change can also be expressed in dollars as follows: the price of a base period "market basket" of goods and services in the CPI has risen from $10 in 1982-84 to $11.65. For further details see the CPI home page on the Internet at www.bls.gov/cpi and the BLS Handbook of Methods, Chapter 17, The Consumer Price Index, available on the Internet at www.bls.gov/opub/hom/homch17_a.htm.

In calculating the index, price changes for the various items in each location are averaged together with weights that represent their importance in the spending of the appropriate population group. Local data are then combined to obtain a U.S. city average. Because the sample size of a local area is smaller, the local area index is subject to substantially more sampling and other measurement error than the national index. In addition, local indexes are not adjusted for seasonal influences. As a result, local area indexes show greater volatility than the national index, although their long-term trends are quite similar. NOTE:Area indexes do not measure differences in the level of prices between cities; they only measure the average change in prices for each area since the base period.

The Phoenix-Mesa-Scottsdale metropolitan area covered in this release consists of Maricopa and Pinal Counties in the State of Arizona.

Information in this release will be made available to sensory impaired individuals upon request. Voice phone: (202) 691-5200; Federal Relay Service: (800) 877-8339.